Major shake-up at film rental chain Blockbuster amid talk of bankruptcy

The American parent of film rental chain Blockbuster admitted this weekend that it was 'exploring all options' for its future in response to speculation that it planned to file for Chapter 11 bankruptcy protection.

The company would not comment directly on the rumours, but said it had already undertaken a restructuring programme.

A report in the US on Friday suggested that Blockbuster could be
just a month away from filing for Chapter 11, similar to a company
voluntary agreement in Britain. This allows management to remain in
control while it restructures the business with the agreement of
creditors. Shares in the group slumped by 37 per cent to seven cents
(4.5p).

A company spokeswoman said that Blockbuster, which still controls
the UK division, planned to put in place 'a more appropriate capital
structure to support long-term growth'.

She said: 'We are making good progress in our recapitalisation
process. Our discussions with the studios and bondholders continue to
be productive and we have every reason to believe we will come out of
the recapitalisation process financially stronger and more
competitively positioned for the future.'

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Major shake-up at film rental chain Blockbuster amid talk of bankruptcy